Another week, another record low for mortgage rates

By Palm Beach Business.com

DELRAY BEACH — It’s the same story we’ve heard the last few weeks; instability in the financial markets has brought down mortgage rate to record lows.

Bankrate’s national mortgage survey found the 30-year fixed rate mortgage averaging 4.92 percent with 0.42 point, down from 4.96 percent a week ago. It’s the second week in a row that the 30-year set a record low.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year averaging 4.78 percent with 0.7 point, down from last week’s 4.84 percent. It’s the lowest point for the 30-year since Dec. 3, when it bottomed at  4.71 percent.

“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” Freddie Mac’s Chief Economist Frank Nothaft said. “The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.”

Bankrate cited a series of international events, including the European debt crisis and the increasing tensions between the Koreas pushing down yields on Treasury bills and bonds. As investors seek the safety of government securities. Yields on the 10-year Treasury bond fell as low as 3.18 percent last week after flirting with 4.00 percent earlier this spring. Mortgage rates are closely tied to yields on long-term Treasuries, including the 10-year bond.

Bankrate’s mortgage experts are mixed on where rates will be heading over the next week. Most — 46 percent — see rates holding about where they are; 38 percent see rates rising. The remaining 16 percent see rates falling further.

Other results from the surveys: Freddie Mac put the 15-year at 4.21 percent with an average 0.7 point , down from last week's 4.24 percent. It's the lowest the 15-year has been since Freddie Mac begain tracking it in August 1991.

The 5-year adjustable-rate mortgage rose to 3.97 percent with an average 0.7 point, from 3.91 percent a week ago.

Bankrate said the 15-year held steady at 4.34 percent, while the five-year ARM rose to 4.26 percent.